How to Get Around Lack of Experience and Credibility
This is something that every real estate investor faces when getting started . . .
“How do I get around a lack of credibility when talking to sellers if I’ve never purchased an investment property? What do I say when someone asks me about my experience . . . or lack thereof? How should I go about getting private money to finance my deals without a proven track record? HELP!!!!”
Ok . . . calm down . . . every real estate investor has gotten past these seeming roadblocks to success. Keyword in the last sentence “seeming.” The lack of experience and credibility factor is much more of a mental obstacle than anything. But let’s break down the common areas where your lack of experience and credibility may be questioned and give you a structure to over this objection.
How to Get Around Lack of Experience and Credibility with . . .
Sellers
When you get the question, “How long have you been doing this?” or something similar that questions your ability to purchase their property . . . say . . .
“Good question. I’m newer to real estate investing and have a mentor who has been in the business for many years. I’ve always been the type of person that values experience . . . I guess just like you . . . I’m not sure if we would be interested in your house or not though . . . not sure if it would qualify for our program. ” Then, start asking them questions again.
You’ve accomplished a few things here. You’ve acknowledged that the seller asked you a “good” question (makes them feel important), you’ve leveraged someone else’s experience (you can use me as your mentor, I’ll be happy to answer any questions you have . . . send your questions here), you’ve said that you’re just like them, and you’ve put yourself in the reluctant role, which is always where you want to be, by telling them their house may not qualify for purchase . . .
You could also change “I’m newer to real estate investing” to “The company that I work with is newer . . .” so that you take yourself out of the decision making role. This is a powerful negotiating strategy!
As soon as you answer their question, get back to what’s important . . . which is asking THEM questions. Here’s a list of questions you should be asking sellers.
Lenders
Let’s talk about how to deal with this obstacle when working with private money lenders and hard money lenders.
First off, realize that when dealing with these potential lenders, it should always be about the deal . . . not you personally. Soooo, when your experience gets questioned, let them know that you’re a newer investor and have a mentor that’s been in the business for many years. Once you’ve educated them on your business model (hard money lenders already know all about it), present deals that match their comfort level.
Hard money lenders may ask you about your experience level, but they lend money because you’re buying property far below value . . . not because you’ve been in the business of buying houses for 10 years and have a 750 credit score. Just make sure to find out how their lending program works . . . what types of properties, price range, areas, what they require to consider a loan (appraisal, title report, inspection, loan to value, etc.). Make sure to provide them everything they ask for when presenting a deal.
With private money prospects, just focus on the fact that you’re buying property at a very low loan to value and that they’re lending based on it being a great deal. Once you explain your busniess model, how they fit as an investor in the process, and have asked them questions about their needs and goals . . . present deals to them that match the information you elicit.
Also, the more you follow up with these prospects over time and present deals to them, the more credibility and rapport you will establish with them.
For more info on the whole process of getting private money, read How to Get Private Money Lenders Beating Down Your Door.
Yourself
Yes, we need to get you past your own mental roadblocks as well. Remember, everyone starts at ground zero, and there are tons of real estate investors all across the country that have overcome the “lack of experience and credibility” obstacle to go on to build massive fortunes in real estate. Therefore, You Can Too!
There are both motivated sellers and willing lenders out there right now that need your help . . . regardless of where you are today.
Get out there, take action, and before you know it, you’ll have experience and credibility. But until then, leverage your mentor’s when you need it. I’m here for you . . . let me know how I can help.
Tags: creative real estate investing, Negotiating, private lending, Private Money, real estate investing, real estate investment financing, real estate negotiating
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Patrick Riddle:
Dusty Keefe:
I agree! We always have to start at the bottom and work our way up. If other people managed to go through these roadblocks, then most certainly, we can too!